Reference no: EM132787951

Question - Sandhill Co. has the following balances in selected accounts on December 31, 2021.

Sandhill Accounts Receivable $0

Accumulated Depreciation-Equipment 0

Equipment 7,100

Interest Payable 0

Notes Payable 10,500

Prepaid Insurance 1,980

Salaries Payable 0

Supplies 2,500

Unearned Revenue 30,000

All the accounts have normal balances. The information below has been gathered at December 31, 2021.

1. Sandhill Co. borrowed $10,500 by signing a 4%, one-year note on September 1, 2021.

2. A count of supplies on December 31, 2021, indicates that supplies of $770 are on hand.

3. Depreciation on the equipment for 2021 is $990.

4. Sandhill Co. paid $1,980 for 12 months of insurance coverage on June 1, 2021.

5. On December 1, 2021, Sandhill collected $34,600 for consulting services to be performed evenly from December 1, 2021, through March 31, 2022.

6. Sandhill performed consulting services for a client in December 2021. The client will be billed $4,400. Payment from the customer is expected on January 14, 2022.

7. Sandhill Co. pays its employees total salaries of $8,500 every Wednesday for the preceding five-day week (Monday through Friday). On Wednesday, January 5, 2022, employees were paid for the last five weekdays of 2021.

Required -

1. Prepare adjusting entries for the seven items described above.

2. Prepare the appropriate subsequent cash entries.